The Gift of Growth: How the Idaho CRE Market Is Setting Up for a Strong New Year

As the year winds down with the holidays, the commercial real estate market is offering its own kind of gift: stability, resilience and the early signs of renewed momentum. Q3 brought cooling across several sectors, but beneath the surface the fundamentals that support long-term strength in the Idaho market remain firmly in place. With population growth, employment gains and steady tenant demand continuing statewide, 2026 is set up to be a strong and strategic year. 

Treasure Valley Industrial 

The Treasure Valley industrial market softened in Q3, reflecting a natural recalibration after years of rapid growth. Vacancy rose from 9.2% to 10%, and net absorption turned negative at -184,548 square feet, driven primarily by deliveries in Canyon County. 

Ada County’s asking rates increased slightly from $1.14 to $1.16 per square foot per month while Canyon County saw its first rate decrease since 2023, moving from $1.06 to $1.04. Rate variation by size remains significant, with spaces under 5,000 square feet continuing to command premiums near $1.50. 

New deliveries and active construction are expanding tenant choice, setting the stage for a more balanced and competitive market in 2026. While Q3 brought softer numbers, the region’s underlying demand drivers remain intact. 

Treasure Valley Office 

The Treasure Valley office market continues to move toward stabilization. Vacancy rose only slightly this quarter, with Ada County at 6.9% and Canyon County steady at 4.1%. These rates remain far healthier than national averages, which continue to trend above 19%.  

Net absorption improved notably. The region recorded -19,117 square feet, a significant improvement from -97,182 last quarter. Asking rates tell a similar story, with Ada County rising to $23.09 per square foot per year. Canyon County saw a modest decline to $20.00 but still sits below the strong pricing levels seen in 2024. 

Tenant preferences continue to favor built-out, move-in ready spaces. Owners who invest in upgrades are seeing shorter vacancy periods, a trend likely to continue into 2026 as companies remain selective about quality and efficiency. 

Treasure Valley Retail 

Retail performance across the Treasure Valley stabilized in Q3. Vacancy improved regionally, falling to 4 percent and staying below national averages. Canyon County saw a notable improvement with vacancy dropping from 6.9 to 5 percent, while Ada County inched up slightly to 3.6 percent. 

Asking rates reflected a shift in demand across corridors, with Ada County rising to $23.15 per square foot per year and Canyon County adjusting downward to $22.65. Despite negative year-to-date absorption of -472,922 square feet, fundamentals remain strong thanks to continued population and labor force growth. 

The market is settling into a balanced, sustainable pattern supported by limited new construction and steady consumer activity. 

Idaho Land 

Statewide land activity was mixed in Q3. Commercial land listings jumped in Eastern Idaho, from 5,170 to 9,964 acres, while Canyon County also rose and Ada County dropped sharply to 1,925 acres. 

Residential trends stayed positive: Ada County’s median new home price reached $552,495, and Canyon County climbed 9.3% to $464,476. Combined home sales in both counties were up 7.9% year-over-year. 

Idaho’s job market remains strong with unemployment at 3.7% and population growth expected to outpace the national average through 2029. With commercial land supply tightening, land leases are likely to gain traction in 2026 for owners and developers seeking more flexible options. 

Southern & Eastern Idaho 

Across Southern and Eastern Idaho, Q3 activity slowed in office, retail and industrial, but vacancies stayed notably tight and asking rates remained steady or rising. Office absorption was negative in both regions (about -21,700 square feet in Southern and -38,200 in Eastern), yet vacancies remain low at roughly 1.8% and 3.5% respectively, with Eastern Idaho maintaining slightly higher asking rates.

Retail also cooled, with Southern Idaho seeing the larger drop in absorption (-77,400 square feet vs. -24,500 in Eastern). Vacancy continued to favor Eastern Idaho at around 2.6% compared with Southern’s 3.5%, and asking rates held higher in the east as well. Construction across both sectors remains limited, keeping space tight going into 2026. 

Industrial saw a similar pause, with both regions posting negative absorption (Southern at -93,200 square feet and Eastern at -25,900), but vacancy held low at about 2.6% and 3% respectively. Southern Idaho remains the only area with meaningful industrial construction, approximately 56,000 square feet underway, while Eastern Idaho recorded none. Even with the quarter’s slowdown, consistently low vacancy and modest development pipelines point to continued stability heading into 2026. 

Looking Ahead 

As interest rates, construction costs and national economic conditions evolve, Idaho’s steady population growth and healthy labor market offer balance and opportunity. 2026 is shaping up to be a strong year for thoughtful and well-informed decision makers. 

From our team at Colliers in Idaho, we thank you for your partnership and trust throughout 2025. We look forward to supporting your success in the coming year and wish you a happy holiday season and a bright start to 2026.